Generation Earn

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For the last few years, I’ve been asking students in my college classes to define the word thrift. After a few seconds of blank stares, I suggest that perhaps they have heard this word in conjunction with thrift stores.

“So thrift means vintage or used?” a student will venture.

Well, no. Not quite.

In part, this was simply a vocabulary issue: "Thrift" is an old-fashioned word for the good use of money. While most college students are bombarded with news about the need for moderation in spending and the necessity of saving, that’s where the lecture typically ends. Introducing young adults to the idea that our choices about how we spend our money should be in keeping with our values — that there are better and worse things to do with our cash in any given scenario based on those values — opens up a new world of personal assessment at which this solipsistic generation excels.

Young people have been dubbed Generation Debt for their proclivities for spending on credit, but that’s an unfair label that can turn into a dangerous self-fulfilling prophecy. Twentysomethings aren’t slackers who are profligate with their money; rather, this is a generation desperate for practical information on modern, values-based ideas of spending, saving and giving back.

“I honestly had no idea what thrift was when I came to this class,” said Lizzie, a freshman. “I knew I had heard the word before, but nothing came to mind. I was surprised when I learned the definition; it was odd to me that it was a virtue. The other virtues such as honesty, perseverance and self-control made sense, but a virtue that has to do with money?”

“It was not until our lecture in class that I learned that thrift does not only mean saving money, it also means being a good citizen by promoting individual well-being and social well-being,” added Melinda, a senior.

Saving money isn’t cool or fun, but looking inward and figuring out your values — and then spending in accordance with your beliefs and goals? Well, that’s a bit more interesting. Some of the best financial guidebooks, including Suze Orman’s The 9 Steps to Financial Freedom, David Bach’s The Finish Rich Workbook begin this way, allowing for an individualized experience. Bach asks readers to create a “Values Circle” — explained in this chapter (PDF) of his book — and then build financial goals around living out those values.

“I like the fact that Bach doesn’t tell me what I should be spending money on because everyone is different and have different things that value that need money,” said Stephanie, a junior, who added that creating her own Values Circle was “transformative.” And her classmate, Aly, was so impressed by the exercise, she encouraged her mother to fill it out as well.

“It turns out that we have similar values about money,” she reported. And as a consequence, both were more restrained during a girls shopping spree over spring break. “We both agreed that excitement and fun were important things to spend money on because the memories will last long then anything else. Needless to say, the purse we were looking at at the time did not fulfill our value of fun or excitement.”

U.S. News & World Report financial columnist Kimberly Palmer realized that while all this advice was useful, young adults were saddled with the Generation Debt moniker and had very few financial experts directing advice specifically toward the needs of their generation. In response, she wrote Generation Earn: The Young Professional’s Guide to Spending, Investing and Giving Back.

Generation Earn is focused on the life transitions of young adulthood — graduating from college with a pile of educational debt, the decision move back in with your parents or struggle through with six roommates and the how to start changing the world before you’ve earned your first million. It’s an upbeat book that offers financial education without a lot of parental finger-wagging. And running throughout the book is the message that thrift is about your core values and choices, not just a string of numbers on a ledger sheet.

In my forthcoming book Generation WTF, I encourage young adults to stick to these values-centered thrift exercises by posting their values on a bathroom mirror, clipping it to a credit card or making their values the “wallpaper” on their cell phones. Molly, a junior, said doing this “reminds me that if I want to live independently I need to save an extra few dollars a day, so I can pay for the apartment to live in after college or be adventurous and go to a new country. Those values should always be on the top of my priority list, every single day. Writing down those priorities encourage me to use my money wisely, so I can live up to them.”

Thinking about your values — and writing them down — makes it easier to remember them when you are debating whether to buy something or not. Indeed, one student said she felt it was a self-fulfilling prophecy: Writing down your values is a commitment that will shape better choices. 

David Bach suggests a similar exercise. “When you understand what’s important to you, it becomes much easier to focus on who you want to be, then on what you want to do, and, finally, on what ‘stuff’ you really want to have,” he writes. And Kimberly Palmer’s book devotes several chapters to “giving back” — a community-service based value that young-adults have been encouraged to embrace from the start.

Despite a popular stereotype, today’s young adults aren’t congenitally lazy when it comes to finances. They simply need to be educated in the values of thrift in their own language. After working with hundreds of them in my college classroom, I’m optimistic that the virtue of thrift is due for a renaissance. True thrift is not about amassing piles of money, but rather leading an honest, generous life in relationship to money, and recognizing the core values that guide our lives. The challenge is to make this timeless message relevant to a new generation.

Christine Whelan is a visiting assistant professor at the University of Pittsburgh and the author of Generation WTF: Getting from "What the #%$&?" to a Wise, Tenacious and Fearless You , to be published next month. Read more of her writing at www.christinewhelan.com.